Preseent Value Exercises

# Preseent Value Exercises - interest rate is a 7 percent b...

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Present Value Exercises Dr. Ron Lazer General Instructions s Use PV and PVA tables from appendix C. s Assume all amounts are compounded annually unless specific instructions are given. Present Value Concepts Question 1 Determine the present value of \$1,000 due in five years at each of the following interest rates: a. 6 percent b. 8 percent c. 10 percent Present Value Concepts Question 2 An investor wishes to have \$5,000 available at the end of five year. State the amount of money that must be invested at the present time if the interest rate is: a. 6 percent b. 8 percent c. 12 percent

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Present Value Concepts Question 3 Determine the present value of an annuity for a period of five years with annual payments of \$2,000, assuming that the
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Unformatted text preview: interest rate is: a. 7 percent b. 10 percent c. 12 percent Present Value Concepts Question 4 What is the maximum amount you would be willing to pay at the present time in order to receive 10 annual payments of \$1,000 beginning one year from now? The current interest rate is 10 percent. Present Value Concepts Question 5 Hays company leases a building at an annual rental of \$2,000 paid at the end of each year. The company has the alternatives of paying the remaining 10 years of the lease in advance on January 1, 2007. assuming an interest rate of 8 percent, what is the maximum amount that should be paid now for the advance rent/lease?...
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## This note was uploaded on 01/09/2010 for the course ACCT 2331 taught by Professor Staff during the Fall '08 term at University of Houston.

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Preseent Value Exercises - interest rate is a 7 percent b...

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